Pompeo’s visit not intended to pressure Payara plan approval – State Dept official

The United States Department of State has poured cold water over concerns that the impending visit of US Secretary of State, Mike Pompeo will pressure the Guyana Government into approving the Payara Field Development Plan (FDP) that is currently being finalised.

During a call-in briefing on Wednesday ahead of Pompeo’s arrival in Guyana today, a senior State Department official explained that the visit was “certainly not an effort to put any pressure” on Guyana, but rather a celebration of the country’s success in the petroleum sector.
After first striking oil offshore Guyana in May 2015, US oil giant ExxonMobil has made an additional 17 discoveries, with production starting in December 2019. Payara is Exxon’s third potential development project within the oil-rich Stabroek Block after Liza Phase 1 and 2.
“The Exxon evaluation will be done on its own merits by the Guyanese experts,” the official stated, adding that US companies were “really” competitive”, but were subjected to the Foreign Corrupt Practices Act.
Secretary Pompeo is scheduled to arrive in Guyana today for a two-day visit during which he would be meeting with President Irfaan Ali and Foreign Affairs Minister Hugh Todd as well as other stakeholders, including the oil companies, to “see how they’re doing, see what their plans are”.
According to the State Department official, the US Government wants to help Guyana, as well as Suriname, to develop welcoming environments for honest foreign investments that the two countries want and need to further their prosperity and development.
He pointed out that Guyana has the opportunity to go from one of the poorest countries in the Region to having the greatest increase in income in the Region in a very short period of time.
“I think leaders in both countries are aware of the pitfalls of what they call the “natural resources curse.” We have, through time, developed lots of programmes and good advice and best practice models and so on that will be shared with these countries under various programmes that different US departments will be running. So that’s clearly a shared interest in being sure that the oil development pans out to fortify the democratic, open, transparent nature of these countries and not to exacerbate problems of corruption and so on,” the official outlined.
A review of the Payara FDP was done and completed by UK firm Bayphase Oil And Gas Consultants, but approval for Exxon’s third potential development project was delayed as a result of the five-month political and electoral impasse that ensued after the March 2 elections.
After eventually taking office on August 2, the new People’s Progressive Party/Civic (PPP/C) Government recruited a team of international experts to conduct an evaluation of the work done by Bayphase, which was contracted by the previous APNU/AFC Government, before granting approval.
Natural Resources Minister Vickram Bharrat last week told <<<Guyana Times>>> that the evaluation was completed and that the legal and technical team from the Department of Energy was currently discussing the draft licence with Exxon to iron out some issues.
In fact, the Minister recently said that the FDP was likely to be approved by the end of this month.
Exxon’s Final Investment Decision (FID) hinges on gaining approval for the development.
The US oil giant has cautioned that further delays in granting approval for the project could result in less revenue for Guyana when the project starts up in 2023.
But experts have argued that unless Exxon is able to give proper environmental and local content assurances and even improve the terms of its contract with Guyana, approval should be withheld.
The first well for the Payara field, whose discovery was announced in 2017, was drilled in a new reservoir, encountering more than 29 metres of high-quality oil-bearing sandstone reservoirs.
The Payara development plan includes a floating production, storage and offloading (FPSO) vessel, named Prosperity. It is expected to produce 220,000 barrels per day, supporting up to 45 wells, including production, water injection and gas injection wells. (G8)